Following Medytox, Hugel and Pharma Research Bio have encountered a crisis, as the government is revoking their manufacturing licenses of botulinum toxin (BTX) products for violating certification and shipping regulations, industry insiders said Friday.

A fierce legal battle is going on over whether or not such violation is illegal, with concerns mounting within the industry over confusion in the market if the regulator pushes ahead with canceling their production permits, they said.

On Wednesday, the Ministry of Food and Drug Safety said it would cancel the licenses of six BTX product items -- two-dose types of Pharma Research Bio's ReNTox and four types of Hugel's Botulax -- for unauthorized shipment. Last year, the ministry also revoked the product approval for six of Medytox's products for similar reasons.

The regulator has approved 31 BTX preparations so far.

If the ministry cancels the product permit for 12, the market will see 38.7 percent of total products disappear, they said.

Hugel and Medytox are the two largest suppliers of BTX formulation in the domestic market.

Hugel's Botulax recorded 72.1 billion won ($61 million) production last year, topping the list. Medytox's Medytoxin came in second place with 58.4 billion won. Although Medytoxin’s production dropped 43.9 percent from 104.1 billion won in 2019 due to the revocation of product license, it still maintains significant influence on the market.

While not as large as Hugel and Medytox, the BTX production and import performance of Pharma Research Bio's ReNTox came around 4.8 billion won.

Considering that the total Korean BTX production and import last year totaled 244.5 billion won, the sum of the BTX production and import performance by the three companies account for 61.6 percent of the total market.

Therefore, considerable confusion may arise if the ministry removes products that hugely impact the overall market, the market watchers said.

However, it remains to be seen whether the ministry will push ahead with its plans to cancel the product permit of the BTX products manufactured by the three BTX makers because all three companies claim that they violated no regulations.

Medytox and Hugel continue to sell their BTX products after a local court accepted the companies' request for canceling and suspending the ministry’s execution of the administrative order to suspend manufacturing and sales of their BTX products.

Pharma Research Bio does not market its BTX product locally.

The three companies also claim that their products were made and sold for export purposes, not subject to the government’s shipping approval.

According to the Pharmaceutical Affairs Act, drugmakers should receive shipping approval for biologic products to sell them in the domestic market.

In response, the ministry stressed that the three companies violated the law.

"Indeed, exports are not subject to national shipping approval," said Kim Eun-ju, director of the Biopharmaceutical Product Quality Control Division at the ministry, in a telephone interview with Korea Biomedical Review on Friday. "However, to be exempt from receiving shipping approvals from the government, the companies must prove that products have been exported backed by documents but failed to do so.

Director Kim pointed out that in the case of Hugel and Medytox, the ministry had confirmed that they sold their BTX products to those who were not wholesalers.

“The three companies said that they handed over their products to wholesalers, but it is important to define what or who wholesalers mean strictly,” Kim added.

Trading companies or wholesalers can only handle export procedures under the current Pharmaceutical Affairs Act.

"The ministry only acknowledges such cases as acting on behalf of a company for export procedures, and wholesalers should not sell the products at home," she said. "As the wholesalers directly sold the products here, it is a violation of the current laws."